What better way to kick off our holiday-season stress than with talk of deductibles, coinsurance and high premiums? Welcome to open enrollment, where employees can re-evaluate their health care options each November.
It’s a prime opportunity to secure better benefits and maximize savings; yet open enrollment is often underutilized. “Although it can be one of the most important decisions Americans make all year, consumers don’t spend enough time researching medical plans — usually because it’s confusing and overwhelming,” says Andrea Woroch, a money-saving coach and consumer expert.
In an effort to simplify the process, here are six factors to consider when deciding what’s best for your family’s coverage and for your bottom line.
1. Look Beyond the Monthly Premium
Calculating your monthly insurance payment, otherwise known as your premium, is a good first step. But don’t opt for a lower monthly premium without factoring in the total cost of care first, including copays — the fixed amount you’ll have to pay out of pocket for every doctor’s appointment or service.
“It may benefit you to pay more per month and less out of pocket if you go to the doctor often, require medications or have a serious illness and know you’ll need to go to the hospital regularly,” says Woroch.
2. Understand Your Coinsurance
Even after meeting your deductible — the amount you pay before your insurance kicks in — you’ll continue paying coinsurance (those pesky medical bills that so easily pile up), which is a percentage of every health service cost and something many consumers overlook, says Woroch.
In general, plans with lower deductibles mean higher coinsurance, which could range from 10 to 30 percent of your bill. While a 30 percent coinsurance may seem more cost-effective than a $3,000 deductible in the short-term, you may think differently after a $20,000 hospital stay.
3. High Deductible Requirements
If you choose to go the high-deductible route, it’s wise to set up a health savings account, or HSA. This allows you to put pretax money toward out-of-pocket medical expenses.
At the end of the year, any leftover money in the HSA a can be rolled over for the following year. Additionally, Woroch suggests asking if your employer offers a supplemental insurance plan to cover out-of-pocket expenses in case of an emergency.
4. Don’t Be Afraid to Ask
“A common problem people face is not knowing exactly what steps to take to get the exact care they need,” says Jonathan Cohen, communications associate at Oscar, an emerging health care provider.
There are resources available to save you time, frustration and money if you seek them out, such as simply speaking with your HR department or your provider's customer service support. Oscar, for instance, has a four-person “concierge team” available to customers once they've signed up online, which can assist in finding an optimal plan.
Furthermore, if you're signing up through a healthcare marketplace and you think your income or situation could potentially make you eligible for a government subsidy through the Affordable Care Act, Cohen suggests asking about that too.
5. Factor in Life Changes
Do you have a baby on the way? Or have you recently tied the knot? You’ll want to factor your new additions into your insurance coverage beyond just adding them to your plan, says Cohen. For instance, with kids, you’ll want to sign up for high-quality pediatric care and potentially a benefit structure that provides free unlimited phone calls to the doctor so that cost is never an issue when you have questions about your child’s health.
6. When Using a Healthcare Marketplace, Act Early
Most employers have a deadline for signing up for benefits. However, when using a healthcare marketplace, delaying your decision on open enrollment will likely cost more of your time as you join the queue of callers trying to beat the deadline.
Signing up as soon as possible will make for a smoother experience without requiring you to pay sooner. Payment will incur on the first date of coverage, regardless of when you set up your health care plan, explains Cohen.